The U.S. Securities and Exchange Commission has charged two men who allegedly benefited from the illegal sales of shares in a company from a self-described blockchain startup.

The Sec has previously warned retail investors against companies that appear to be profiting off of an association with blockchain.

Attorney T.J. Jesky and business affairs manager Mark DeStefano allegedly earned around $ 1.4 million in 10 days (from December 26, 2017, to January 5, 2018) by selling shares in Hong Kong-based UBI Blockchain Internet Ltd.
The SEC’s complaint, filed in federal court in New York, accuses Jesky and DeStefano with violating the registration provisions of the federal securities laws.

The SEC described UBI as “a company claiming to have a blockchain-related business,” but the charges allege that UBI Blockchain didn’t have much to do with blockchain at all.

The SEC has issued multiple trading suspensions for suspicious trading that has occurred with crypto or blockchain affiliated companies. The sales stopped when the SEC temporarily suspended trading in UBI Blockchain stock earlier this year.

According to Robert A. Cohen, Chief of the SEC Enforcement Division’s Cyber Unit.

“This case involved both a trading suspension and people holding restricted shares who attempted to profit from the dramatic price increase with illegal stock sales that violated the registration statement.”

The SEC’s investigation is ongoing, is being coordinated by both the Microcap Fraud Task Force and the Cyber Unit.